Global Mining Investing is a reference eBook to teach investors how to think and act as investors with a underlying theme of managing risk. The book touches on a huge amount of content which heavily relies on knowledge that can only be obtained through experience...The text was engaging, as I knew the valuable outcome was to be a better thinker and investor.

While some books (such as Coulson’s An Insider’s Guide to the Mining Sector) focus on one particular commodity this book (Global Mining Investing) attempts (and does well) to cover all types of mining and commodities.

Monday, August 22, 2011

It is hard to envisage the markets recovering unless the EU gets its debt obligations in sync. It is very hard to imagine that happening, so we might expect more volatility in the short term. Unless the US overshadows these events of course with more quantitative easing. Don't see this happening though; unless equity markets slide.

Wednesday, August 10, 2011

The Fed has said that it will freeze interest rates for 2 years. Whilst this can be considered a measure to give the market confidence; the question has to be asked, is the measure reasonable, or just another scam to suck in long suffering taxpayers and investors. Consider that 3 Fed governors rejected the idea. Three does not make a majority; but it strikes me as ludicrous that these governors would commit to such an arbitrary policy. This is all 'illusionary'. It strikes me as a rather desperate measure to commit to something that one has no necessary intention to keep. i.e. Ben Bernacke is not Santa. He is allowed to keep his promises. More worrisome is the fact that its not clear to me that the majority of other Fed governors have committed to the freeze.

In any respect, they are bankers. I would sooner believe in Santa than the promises of a Fed chair? Will the market buy this? I doubt it. This is why the doubt remains in the market. The market might be volatile if the Fed does not step in and clarify. Ben - Stop playing silly buggers with my money. Oh, its ok, I'm holding gold!

Here is a statistic for you. In the last 5 days some $4.5 trillion was wiped off the value of global equities. That is despite the value of all Italian debt being just $3 trillion. Of course, there is also the debt of the US, which would be another $14 trillion.

Of course a great deal of that debt is actually sensible and sustainable, i.e. Not requiring any bail out. We might then ask whether there is a need for equities to fall further. The answer is a resounding nope. Expect a recovery. The signs are there. The US Dow Jones index closed at its lows. I expect this will be its double-bottom, and the market will gap up tonight.

We might expect gold to fall, so people should shift from gold producers to explorers, as confidence rebuilds. Ready for another rally. Will it require more Fed stimulus? Yes, probably to give it some momentum or sustainability.

Tuesday, August 09, 2011

Gold stocks are all the rage at the moment, and the Australian market makes a lot of sense for several reasons:

1. High levels of household indebtedness mean there are political reasons for the govt to keep the Overnight Cash Rate low

2. The subdued industrial demand for commodities means the currency is going to be weaker than otherwise would be the case; though not so bad to effect confidence.

3. Gold prices are $1750; probably have downside, but are otherwise going to $2400/oz

The question then is - what to buy?

There are of course high-priced gold producers, but can also look at explorers. Why? Gold explorers need confidence, and with confidence restored by the Fed, there is a good chance for another rally. This is all in accordance with our 5-year plan, i.e. A 'sideways' market, where you have to trade in & out, and otherwise simply hold gold or gold stocks otherwise.

When the Dow approaches previous highs, you sell the explorers, unless they are close to production, i.e. They have finance. You can keep doing that until gold approaches $2400/oz.

We recommend a number of explorers at our specs blog, and we offer a 2nd edition ebook to help you buy the right ones.

These are the perfect conditions for gold; low interest rates, subdued or negative growth and monetary debasement. Low confidence adds to its charm.

Sunday, June 19, 2011

The market is coming off significantly at present, and given that it has failed to breach previous resistance and there seems no prospect of support from the central banks, there is good reason to expect a significant correction. This has us looking for significant support levels:

1. The 10,550 level in the Dow Jones - we need to be watching for a breach of the uptrend since 2008.

2. The 4,000 level in the ASX-200 - there is a shorter support of 4300, which might be a more probable support if the Dow Jones breaks its uptrend.

The implication is that there will be good buying as the market confronts these vulnerabilities.

Monday, March 14, 2011

Ok, the Japanese government has its excuse for an economic meltdown. It was not their fault, it was the earthquake. They just never had a chance. The US of course has their excuse as well. Bad luck, and of course others. The Republicans will blame Clinton for easing restrictions on home lending, and the Democrats will blame Bush for allowing the problem to grow. Others will blame Greenspan. The Europeans will blame those 'shameless Southerners', the Greeks, Spanish and Italians for loving life. And of course taxpayers will sign, all too happy that they have the power to repress all bad news.

Nevermind that this current $0.5 trillion in stimulus is coming on top of a public debt which exceeds 200% of GDP. Nevermind that the Japanese savings cannot sustain this level of indebtedness. Someone will pay for this largesse. My guess it will be Japanese property holders; a lot with a 'shot' of currency debasement.

Thursday, March 10, 2011

The S&P500 has broken support in the last 2 days....sadly I was not watching the market. Irrespective, I was well cashed up, since a number of stocks I like had announced issues, so it was of no consequence. Remaining in my holdings are some gold stocks. Rest assured however there will be some good trading rallies on the way down. Gold explorers, which I very much like, will come under threat because they are intangible, even at a time of high gold prices.

Monday, January 17, 2011

Wood MacKenzie, coal industry consultants are forecasting hard coking coal prices to reach $400-500/tonne as a result of the flooding in Queensland. We previously wrote about the impact of flooding on Queensland's coal industry. I must admit I opened my mouth too soon, as I did not know the severity of the floods. The arguments however remain:

1. Power generators tend to stock up to 90 days supply for any shortages - that means there will be a great many consumers who are ok for 3 months. We might also expect cement companies and the like to sell their coal and for them to use other viable feedstock, since they have even more flexibility.

2. The prospect of high coal prices will ensure that engineering contractors give priority to restoration of exports. i.e. The fact that Rio Tinto and BHP are primarily affected, gives them the capacity to mobilise people within their companies, i.e. from iron ore (west coast) to coal (east coast) in a matter of days.

4. There will undoubtedly be sections of railway track which are effected, however its hard to believe 10km-sections have been washed from their foundations. Track is not like a bridge. Particulate matter is more likely to accumulate in front of, in between and behind track than pull it out. Even if bridges are uprooted, temporary trucking solutions are possible. This is more likely to protect the track rather than wash it away; albeit encasing the track and infrastructure in a lot of waste.

5. What might be categorised as 'thermal' coals for sale are not necessarily strictly thermal coals, but are likely to have some coking properties, which means they can be blended with hard coking coals in order to achieve sales.

6. Opportunists abound in the world, and there are none greater than the Chinese. Expect the Chinese producers to come up with 50Mt in the next 3 months. This will be thermal coal mind you, but Australian and Colombian premium ('semi-coking' in a crisis) coals will attract a premium.

7. Steelworks will adjust their coal ratios in order to take lower quality coal and this will result in reduced steel output. Just ask the Indians; they have been using dirt for coal for the last 50 years.

8. Australia is the largest coal exporter, however let us not forget the capacity of governments, particularly of China and India to internally regulate markets. i.e. These governments can take measures to direct resources into coal markets. i.e. If the Chinese govt (which owns a great deal of heavy industry and rules with immense punitive power) redirected coal from cement production to power production, consider the impact. China produces 1.5 billion tonnes of coal per year, compared to Australia's (I am guessing as I'm out of date) 240Mtpa. Now this is all coal...but I am sure that some Australian thermals will miraculously be going to coking markets...if only as part of a blend. With what you ask? Canadian coals, Australian exports which are unaffected; Australian shipments already in stockpiles around the world, etc. It is not hard to envision that trucks will be used to move coal around washed out railway sections...even if it does diminish the quality of the coal through rehandling.

9. Another consideration might well be the seasonable timing of the flooding. We are in the summer for Australia, so winter for Asia. This is thus not a time of great air conditioning demand, but significant heating demand. We have also to consider the fact that coal is base load and some countries have hydro pumpstorage capacity which they can run down, and then rebuild when coal stocks rebuild. Time of day electricity pricing might also be significant in some markets, though I'm outdated on these facets. I think Asia has been slow to adopt such practices....because they remain highly regulated or under-sophisticated power markets.

10. In times of need, might we also expect scrap metal prices to take off, and in the process taking some pressure off the need for raw materials, and therefore the volatile shipping freight demand. The greatest impact will probably felt in bulk carrier availability...but even then if prices ever reached $400/tonne, you could well expect Chinese barges to be towing coal to China from Queensland. I exaggerate of course, but we can reasonably expect freight charges to rise, and all manner of smaller carriers in the panamax class to be used to deliver coal when those facilities are back on track. No doubt those railways which are the worst effected will be recommissioned last. i.e. Some will hardly affect shipments I suspect.

In the meantime, coal mine pits will be dewatered (that might take a week), with another week for those pits to dry out, and tested for pit wall stability. Looking at the rainfall distribution from the following Bureau of Meteorology map, I don't think the problem is bad outside the Surat Basin.

At the end of the day, it is hardly a time of rapacious consumption...that we need coal prices to rise to $400-500/tonne. My expectation is that they might get up to $250/tonne in the spot market, but it will be such a short-lived phenomenon that it will scarcely make any difference to producers, and more probably the shipping companies will make all the money, and those profits will go a short way to offsetting their losses for all the ships at sea waiting for non-existent coal in the preceding month.

Nope...merely Queenslanders will need to work harder for a month or two, before they get back to their jet skis. Such is the legacy of capitalism....of course if we continue on our path towards fascism we will experience a different phenomenon....the 'flow-on' effect of natural disasters causing a crippling blow to services.

People like to make money in crises. Fear is the easiest way to motivate people. Its far more effective than greed. You get people in a place where they suspend their judgement and they are compelled to seek the most tangible, concrete reward...a report which will promise all the solutions. You kind of feel compelled to buy it just to make sure that you have your bases covered...as you are accountable. The media loves to promote crises as well, because it sells newspapers....and best of all, its like free advertising. I can imagine there are hoards of procurement managers around the world looking at buying the Wood MacKenzie report. I just question whether they will have any special insight. They will have to do a lot of research....and I can't imagine that they will have any greater insight than those coming to them in fear or greed. Why? Because none of them will be looking at the bigger picture...and all will instill their fears and any consultant is going to reflect those fears. After all, they will not be going out in the field, nor have the full context to make accurate judgements. My belief is that an accurate report will take 2 months to prepare and by then the problem will be almost over.

It is a crisis to be sure....I would just hate people to think much money is going to be made out of it. It lacks too many imperatives for a real crisis:

1. Scarcity

2. Lack of substitutes

3. Longevity

That is my 'not so humble' opinion, but then I find humility greatly overvalued. An excuse for poor analysis. I'm only human....all manner of injustices have been performed under such catch cries. My excuse is rather than I have greater objectives in mind than to merely make or save you money.

Wednesday, January 05, 2011

If you read the press, you will hear that "Queensland (Australia) is losing up to A$100 million ($131 million) a day in coal exports because of the unprecedented floods". The reality is far less tragic, for a number of reasons:

1. Coal exporters and consumers have come to expect disruptions to coal supply. For this reason most coal consumers have 60-90 days of inventory capacity to meet their immediate needs. The implication is that, if we assume they each have an average of 70 days capacity utilisation, then the consumers have over 2 months to receive supplemental coal supplies in order to ensure normal power, steel or cement plant operation.

2. Coal producers have long and short term contracts, and those contractual obligations are set at market price, so there is no incentive to go elsewhere.

3. Coals from different mines vary in quality, so consumers do not like to disrupt supplies necessarily unless there is some commercial or supply reason to do so, otherwise they are creating technical/operational difficulties they don't need.

The implication is that Australia is not losing that amount of money; those exports are simply being deferred, though not without cost. So what costs can we expect? Well, ships are going to sit idle for 2 weeks, and for the next few months after, they will be fully booked rebalancing consumer stockpile inventories. Money will need to be expended by Queensland Rail to rehabilitate those sections of track damaged by the flood. These companies might need to employ people on overtime, however they will also have insurance to cover them for such events. The media reported that 100's of kilometres of track were destroyed...more likely just submersed....though there will be considerable damage where there is flow because saturated soil loses its cohesion, so track is more easily ripped up by flowing water.

The biggest loss is of course to agriculture and the destruction of property. It strikes me as silly that insurance companies only cover people for the effects of rain, and not flooding. I know that there has been this response before by insurance companies when houses on the South Coast of NSW were flooded. Is not the intent of insurance to protect a person from unforeseen events, and that the insurance companies are the ones to identify them, since it is a technical risk, which they are in the business of assessing. i.e. They are not fulfilling the spirit of their role. This is where you get ambivalent court rulings, because the law does not clearly establish whether a judge should rule:

1. With the letter of the law, i.e. The law is a dogma, held out of context. This is the basis of statutory law, and explains why bureaucrats are so unthinking in your dealings with them. Its the policy, and they have no power to interpret it 'in context'.

2. With the spirit of the law, i.e. The law is a philosophical construct, that it is based on principles, and those principles are held in context. This is the basis of common law, where judges make new law by applying the law to specific contexts.

If you appreciate that statutory law is being called upon to fill the 'perceived gaps' in common law, it will be apparent that we are being a more unthinking society because of such creeping dogmatism. This can continue until we finally march 'with pride in democracy' towards fascism. I would already argue that we are already there, but its a matter of degree. Some of you might want to wait until Comrade Rudd is marching with the band down Anzac Parade, but I just consider that a huge opportunity cost, more of a concern than our 'deferred' exports.

Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.

The Philippines property market remains one of the strongest in Asia thanks to rising incomes, rising population and rapid rates of urbanisation. The administrative reforms of the Arroyo government have given way to improved administration under Aquino. ASEAN countries can be expected to achieve even greater price gains than Western markets, demonstrating that this super cycle is far from over. Buying Philippines Property 2010 - Downloadthe table of contents or buy this 2-volume eBook at our online store for just $US19.95.

Investment Strategy

If you are investing for the long term, you still need an investment strategy. Dont be fooled by the rhetoric of fund managers. The reason they advise you to 'buy & hold' is because they dont want to compete with you in sell-offs. Markets and industrial sectors are cyclical, so they demand trading to get the best returns. Fund managers actually cant hope to match the performance of small investors (if you are half good) because they have to manage huge amounts of funds and charge you a fee besides.MY ADVICE is (i) look at a range of market indices and decide upon what level of correction would give you the justification you need to get in & out of the market. It might be a 5-10% retracement or a break of trend. (ii) Diversify if you dont have an intimate knowledge of the company or management. More than 30% in one company is aggressive.

The NZ property market is shaping up as one of the most attractive property investment markets for the next few years. High yielding property and the collapse of the NZD make NZ the perfect counter-cyclical investment if you buy right! In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

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Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.